The experiences of indigenous communities with tax filing

POR Number: POR #040-16
Contract number: 46558-172143-001-CY

Contract award date: 2016-09-14

Delivery date: 2017-06-01

Prepared for: Canada Revenue Agency

For further information:

Media Relations
Canada Revenue Agency
4th Floor, 555 Mackenzie Avenue
Ottawa, ON K1A 0L5
media.relations@cra-arc.gc.ca

June 2017

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Executive summary

Benefits accessed through the tax system can provide a significant source of income for many Canadians. In lower-income households, access to such benefits can increase income by as much as 50 per cent. The Canada Revenue Agency (CRA) has identified Indigenous Peoples as a group who could benefit from increased participation in the tax system and access to benefits, such as the Canada child benefit (CCB) introduced in July 2016. Eligible individuals need to file an annual tax return in order to receive this and other benefits.

To ensure that Indigenous Peoples are able to fully participate in the Canadian tax and benefit system, the CRA commissioned Phoenix Strategic Perspectives Inc. (Phoenix SPI) to conduct qualitative research with Indigenous communities to identify issues and challenges related to tax filing. There were two elements: 12 discussion groups with community members and band council members of six Indigenous communities; and 42 in-depth telephone interviews with intermediaries working in Indigenous communities. The data collection took place between February and May 2017.

This research was qualitative in nature, not quantitative. As such, the results provide an indication of participants' views about the issues explored, but they cannot be generalized to the full population of Indigenous communities or intermediaries working in Indigenous communities.

The purpose of the study was to obtain Indigenous perspectives on tax filing to identify barriers to filing and benefit uptake. The objective of the research was to develop a better understanding of the reasons that Indigenous Peoples may file, or not file, a tax return. The CRA intends to use the research findings to develop outreach programs and communication products to help individuals access benefits and credits available through the tax system, including the new, non-taxable, Canada Child Benefit.

Key findings are as follows:

Personal experience with CRA and tax filing

At least a few members in each community said they have contacted the CRA on occasion. Contact was most often by phone but some have visited the CRA website to look for information or answers to their questions. Personal experiences with the CRA tended to vary. Some described their encounters as positive, using expressions like 'friendly' and 'helpful'. Others described their encounters less positively, using expressions such as 'confrontational' and 'badgering'. Still others focused on delays or problems when contacting the CRA, observing that they spent a lot of time 'on hold', 'had difficulty getting answers to their questions', or 'had difficulty understanding the CRA representative'. A majority of participants in each group indicated that they have filed a tax return, usually through someone else (e.g. a tax preparation company) or with the assistance of someone else.

Tax filing – challenges and benefits

Routinely given reasons to explain why some people do not file an annual tax return include the following: no need due to tax exempt status; no income to declare; limited tax/financial literacy; difficulty understanding the process; the costs associated with filing; no support/no one to help them complete their return; and concern about owing back taxes.

The most frequently identified advantage or benefit to filing an annual tax return was getting refunds or benefits payments. Other perceived benefits include the view that it is a good habit to develop, the importance of having a paper trail/being on file with the CRA, avoiding the inconvenience of back filing, and needing tax returns if one wants a loan or mortgage from a financial institution.

Frequently identified challenges or difficulties Indigenous Peoples encounter when trying to complete their tax return include the following: the cost of filing a tax return; limited financial literacy; limited computer or Internet access; lack of access to services, advice or assistance in their community regarding tax filing; and difficulty assembling the required documents (i.e., it was observed that this is often the case when couples separate and there are custody-related issues).

Experience/Interest in community assistance

Based on research findings, existing assistance to help Indigenous Peoples complete their tax return is limited. At the very least, members of the various communities often indicated that they were personally unaware of any such services if they do exist. Services in the community that are available tend to be ad hoc (e.g., an individual offering to help) or available only to community members on social assistance. For the most part, services of which community members are aware are outside the community (e.g., tax preparation companies). The most frequently identified ways to encourage or motivate tax filing among Indigenous Peoples include the following: in-person outreach visits from CRA with a focus on the reasons to file annually; and on-reserve training/information regarding filing taxes, including help with filing.

Tax credits/benefits

Among community members, awareness of the various tax credits and benefits available from the Government of Canada was uneven. On the one hand, awareness of the CCB and the GST/HST credit is widespread. Nearly all participants in every group with community members claimed to be aware of these and both were routinely identified by name, with female community members typically first in identifying the CCB. On the other hand, and with one exception, awareness of other benefits was relatively limited, with no more than a couple of participants in any group identifying any other credits or benefits by name.

Awareness of tax credits and benefits comes about in a variety of ways which include the following: word of mouth; when filing taxes (from the tax preparer); family and friends; news/local radio/TV; and community services (e.g., health services informing expectant mothers of the CCB). Awareness of changes made to tax credits and benefits was limited among community members, and awareness tended to focus on changes to child-related benefits (e.g., that the Universal child care benefit was eliminated).

Outreach/Communications

The most frequently identified ways for the CRA to raise awareness about tax credits and benefits was to undertake visits to communities to conduct presentations, workshops, or information sessions. Other measures mentioned with some frequency include the following: developing tools/materials adapted for Indigenous People; having targeted information campaigns by audience (e.g. youth, young families, elderly/elders); working through local institutions/organizations/service providers; using existing community communications channels, such as Facebook or local radio; liaising with other federal government departments, such as Service Canada, which may already have a presence in the community; keeping messaging simple and clear; and understanding the target audience.

The actual expenditure was $152,597.36 (including applicable taxes).

Political neutrality certification

I hereby certify as a Representative of Phoenix Strategic Perspectives Inc. that the deliverables fully comply with the Government of Canada political neutrality requirements outlined in the Communications Policy of the Government of Canada and Procedures for Planning and Contracting Public Opinion Research. Specifically, the deliverables do not include information on electoral voting intentions, political party preferences, and standings with the electorate or ratings of the performance of a political party or its leaders.

Signed:

Alethea Woods, President
Phoenix Strategic Perspectives Inc.
Date: June 1, 2017

Methodology

To meet the research objectives, qualitative research was conducted with members of Indigenous communities across Canada. There were two elements to the data collection: discussion groups with community members and band council members; and in-depth telephone interviews with intermediaries working in Indigenous communities. In advance of the research, a series of key informant interviews were conducted with representatives of each of the communities that agreed to participate in the research. The purpose of this set of interviews was to obtain feedback from people knowledgeable about the community to help finalize the research design to maximize its effectiveness.

Discussion groups

A total of 12 discussion groups were conducted, with two groups held in each of the following Indigenous communities:

• Sunchild First Nation (Alberta)
• Sagamok Anishnawbek First Nation (Ontario)
• Cree Nation of Mistissini (Quebec)
• Sheshatshiu Innu First Nation (Newfoundland and Labrador)
• K'atl'odeeche First Nation (Northwest Territories)
• Fort Nelson First Nation (British Columbia)

Agreement to participate in the study was obtained from the Chief of each community before any research-related activities were undertaken. Communities were selected based on a mix of factors, such as size, geographic location, and access to the internet, to ensure well-rounded representation. One group in each location was conducted with adult community members, 18 years of age and older, and the other group with members of the local government (e.g., band council). For the groups with community members, approximately two-thirds were parents/guardians with dependent children. In addition, participants were mixed by age, gender, education and employment status. The groups with members of the local government included Chiefs and current council members.

The following specifications applied to the discussion groups:

• The groups were conducted in a facility in each of the communities. See Annex 1 for a profile of the communities.
• For the groups with community members, 14 members were recruited for eight to 10 to show. Turn-out was good is most communities, with nine to 14 participants attending the sessions. One community was affected by winter weather, so turnout was lower—five participants attended the session.
• For the groups with council members, the Chief and all councillors were invited to attend.
• Community members received a $100 honorarium to participate. Council members did not receive an honorarium. Instead, a donation of $500, to be used within the community, was provided to the council to thank them for their participation.
• Community members were recruited through several methods, including word of mouth (a flyer advertising the research or a local champion who raised awareness of the research), cold calling using a targeted sample frame developed by Phoenix SPI, and on the ground, door-to-door recruitment with support from a local contact person.
• Each group lasted approximately two hours. In terms of the format, the groups were free-flowing, open discussions structured around a discussion guide.
• The research was conducted between February 28^th and May 17^th, 2017.

The moderators for the twelve discussion groups were Philippe Azzie and Alethea Woods. Philippe conducted the sessions in Alberta, Ontario, Quebec, and Newfoundland and Labrador, and Alethea conducted the sessions in British Columbia and the Northwest Territories. Both moderators contributed to the final report.

In-depth interviews

A total of 42 interviews were conducted with a mix of intermediaries from across Canada working in the following areas:

• Administrative services
• Education services
• Employment-related services
• Health-related services
• Social services
• Taxation

This included intermediaries working within Indigenous communities who were employed by the Band office, as well as intermediaries working for an external organization that provided services to one or more Indigenous communities. All but a few of the intermediaries who participated in the research were Indigenous. A more detailed description of the audience can be found in Annex 2.

Recruitment undertaken on the ground in each community and through a sample frame developed by Phoenix SPI. All interviews were completed in English, by telephone, and lasted approximately 35 minutes (although some lasted up to one hour). Participants in interviews were not limited to the communities where the discussion groups took place. Intermediaries received an honorarium of $150 in appreciation of their time. The interviews were conducted between March 6^th and April 11^th, 2017.

Notes to reader

This research was qualitative in nature, not quantitative. As such, the results provide an indication of participants' views about the issues explored, but they cannot be generalized to the full population of Indigenous communities or intermediaries working in Indigenous communities.